Free Portfolio Review – Equity markets continue to be volatile. Are you at risk?

Moderate growth in the US suggests that interest rates may rise. In Canada, the decline in raw material demand and the decline in the value of the Canadian dollar will likely act as a drag on domestic interest rates. That situation could continue until either rate increases in the US start to have an impact or extraneous events impact financial markets.

This potential gap between Canadian and US interest rates suggests the potential for some shocks. Is your portfolio positioned to benefit from any potential gains? Are you protected from the inevitable setbacks?

What if you could reduce risk & volatility in your portfolio and have a manager who would put your best interest before his?

I would like to introduce you to Sprung Investment Management. Our investment management approach is based on a simple principle: the management of risk, not the management of returns.

Our free portfolio review will help you understand the quality of your current holdings; whether or not they meet your investment objectives and if they align with your risk tolerance.

That approach may seem counter-intuitive to many investors. They assume that investment management is all about managing returns and expect their advisor to out-perform the market. What they fail to understand is that by so doing, they are in fact taking on more risk. If a fund out-performs in a rising market, it is likely to under-perform in a declining market. That’s exactly what many Canadian investors experienced in 2008: while the TSX Composite Index declined by 33%, many supposedly conservative large-cap equity funds declined by 40% or more. Why does this happen?

Burnt by that experience, many investors abandoned equities for the apparent safety of fixed-income investments. As interest rates rose last year, many investors moved back into equities.

At Sprung, we stick to high-quality Canadian and US publicly traded companies, carefully diversified across the economic sectors. Our investing approach preserves wealth by focusing on company fundamentals and carefully scrutinizing the prices paid for securities. Our decisions are based on due diligence and staying our course rather than chasing the latest market trends. This is the same approach embraced by value investors such as Warren Buffett. Learn more about Warren Buffett here>>

Based on decades of experience, we have found that our three-part value investing strategy is the best way to reduce risk and volatility and earn consistent returns over time:

1) Appraise the intrinsic value of each company over a business cycle;

2) Seek long-term growth of capital by investing in companies that are undervalued;

3) Utilize a margin of safety to promote return of capital…not just return on capital.

On the fixed-income side, we currently hold bonds with short durations to limit the effect of interest rate hikes. Of course, the percentage of fixed-income investments each of our clients holds is based on their objectives, income needs and risk tolerance, not a cookie cutter view of the market. Learn more here>>

I founded Sprung Investment Management to meet the personalized needs of private clients, not-for-profit organizations, endowments, foundations and small institutions. As President, I am responsible for the firm’s overall direction and investment portfolio decisions. I have more than 30 years experience in the Canadian investment industry and have managed portfolios as large as several billion dollars for YMG Capital Management Inc., Goodman & Company, Ontario Teachers’ Pension Fund, Ontario Hydro and Cassels Blaikie & Co. Ltd. I appear regularly as a commentator on BNN-TV and am a frequent contributor to the Canadian financial press. Learn more about ushere>>

What makes us different? It is a source of pride for us that we are discretionary investment managers, not brokers. Sprung Investment Management is committed to meeting a fiduciary standard. A fiduciary or best interest duty (already the norm for accountants and lawyers) is a legal requirement that a manager must put the client’s interests first. That includes avoiding all conflicts of interest and making the best recommendations for the client even if it means lower fees or commissions for them. Many brokers and advisors do not meet this high ethical standard because of the conflicts of interest inherent in their business model. (It’s worth noting that the OSC recently floated the idea that brokers should meet a fiduciary standard; IIROC, their industry body, is fighting the proposal tooth and nail.) Learn more here>>

Some of our clients have little interest or experience in investments. Others are highly successful investors who prefer to devote their time to other uses, such as working in a business or a profession, travelling, or spending time with their families. Some have hired us because their portfolios have reached a size where they feel our fees for a customized portfolio are very favourable compared with the fees embedded in mutual funds, WRAP accounts and other off the shelf financial products.

Some clients simply want to arrange matters so that their spouses and loved ones have experienced investment management when they can no longer provide it.

As interest rates rise and equity markets once again beckon, investors are re-evaluating their risk exposure. Does your portfolio include hidden landmines that could explode as rates rise? If you are not sure, we are pleased to offer you a free, no obligation portfolio review. We will help you better understand the quality of your current holdings, whether or not they meet your investment objectives and if they align with your risk tolerance.

I am able to provide this personal, in-depth service because we keep our client list limited to a small group of investors. Right now, we are able to take on a small number of new clients–but once those spots are taken, we can’t promise to accept any more. We urge you to contact us for a free, no-obligation consultation if you think Sprung Investment Management Inc. may be for you.

Sincerely,

Michael R. Sprung, CFA

P.S. We are not a broker, so when we manage clients’ portfolios we do not receive commissions, nor do we receive any hidden payments from brokers or fund managers. Our income comes only from the management fees on the portfolios we manage.

*P.P.S. Our free, no obligation portfolio reviews are offered to Canadian investors with a minimum $500,000 portfolio. We appreciate your trust and will keep your personal information strictly confidential. After your review is complete we will, upon your instructions, either destroy or return your information to you.

Yes! I would like to accept your offer of a free portfolio review. I understand I am under no obligation and no one will pressure me. Please contact me.